How previous year adjustment values are posted
Previous year journals are used to make corrections to your accounts after you have processed a year end.
Previous year journal values are recorded differently depending on whether journals are posted to Balance Sheet or Profit and Loss accounts. This is because in each financial year the Profit & Loss essentially begins again, but the Balance Sheet carries on. The balance of all P & L accounts is transferred to the Accumulated Profit account as part of the year end process.
You can't enter a previous year journal if the accounting period doesn't exist. To make sure that the journal is included in a prior year trial balance, previous year journals always have to update the balance of an accounting period. If you've never processed a Year End in Sage 200c, the required accounting period(s) in the previous year may not exist. When this occurs you won't be enter a journal for that date.
Note: We recommend that you do not use this option if you are using consolidation. Adjustments to prior year journal values are consolidated into the current consolidated period and will distort current year values.
Journals to Balance Sheet accounts
If you enter a previous year journal to Balance Sheet account, this updates the following values
§ The period balance of the nominal account for the date of the journal.
This is shown when you run a prior year trial balance for that period.
For example, if the journal is dated in November of the previous year, then November's balance is updated. When you run a prior year trial balance for November, then the new value is reported.
§ The closing balance for the nominal account at the end of the previous year.
This is shown as the YTD value for this nominal account when running prior year reports.
For example, if the journal is dated in November (period 11), the YTD value for the previous year is updated. When you run a prior year trial balance for December (period 12), a new YTD value is reported.
§ The current year to date balance.
This is shown on your current year reports.
For example, if the journal is dated in November of the previous year, then the YTD balance on the current year is updated. When you run a trial balance for the current year, a new YTD value is reported.
If you enter a previous year journal to a P&L account, this updates the following values:
§ The period balance of the nominal account for the date of the journal.
This is shown when you run a prior year trial balance for that period.
For example, if the journal is dated in November of the previous year, then November's balance is updated. When you run a prior year trial balance for November, then the new value is reported.
§ The closing balance for the nominal account at the end of the previous year.
This is shown as YTD value for this nominal account when running prior year reports.
For example, if the journal is dated in November (period 11), the YTD value for the previous year is updated. When you run a prior year trial balance for December (period 12), a new YTD value is reported.
§ The value of the Accumulated Profit nominal account (as this account would have been affected by the Year End).
This is shown on your current Balance Sheet.
For example, if the journal is dated in November of the previous year, the Accumulated Profit for your current year is updated. When you run the trial balance or Balance Sheet for the current period, then value of the previous year journal is reflected there instead.
Reporting on previous year journals
You can see a list of all the previous journals you've entered using the Previous Year Journal List report (Nominal > Nominal Reports > Account Analysis > Previous Year Journal List.